Non - Banking Financial
Markets

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Capital market generally provides financing to companies through issuing shares on company incorporation or capital increase. This is in addition to using debt instruments to obtain the needed financing. Financial instruments available on the market provide different alternatives of return and risk, wide range of investment and good opportunities to attract foreign investment.

The legal framework of the Egyptian Capital Market consists of several legislations and rules that allow the Authority to play an effective role in protecting investors, regulating the market and supervising brokerage companies.  In addition, it provides the continuous development of FRA’s supervisory role. These rules and regulations include Capital Market Law no. 95 of 1992, its Executive Regulations, Central Securities Depository and Registry Law no.no. 93 of 2000, its Executive Regulations, Listing and Delisting  Rules , Membership Rules  and  Trading Rules in the Egyptian Stock Exchange and other decisions  issued by FRA’s Board of Directors to regulate the Stock Market.

The capital market sector also serves market infrastructure institutions with its three pillars: Stock Exchanges, clearing and settlement companies and Investor Protection Fund (IPF), this is in addition to a group of securities companies engaged in a variety of non-banking financial activities to serve this vital sector.

 In the stock market, many transactions are held on securities and financial instruments that include stocks, bonds, sukuk and securitization bonds. Besides,  investment certificates that take the form of companies, index funds and EDRs all of which are traded using modern high performance trading platforms  whether  to hold transactions in the main market of the Egyptian Stock Exchange or large transaction market or the main bond market system or trading on shares of small and medium-sized enterprises (NILEX).

Egypt's primary capital market witnessed a remarkable rise in the issuance market which rose to 151 billion pounds. The issuance of capital increase shares was amounted to 1942 issuances with an issued value of 127 billion pounds. In addition, five new issuances of securitization bonds were issued with a total value of EGP 2.9 billion pounds. That is besides the rise that has been witnessed in the Egyptian Stock Exchange indices during the transactions that were held in 2017, as the main index EGX30 jumped to its highest level to reach 15019 points recording a rise by 22% from the previous year.

Egypt's capital market ranked the first on the Arab Stock Markets and maintained its position as the best performer in the world since June 2013, according to the MSCI Price Index-IMI. The report also noted that foreign investors took over 28% of total transactions in the market during this year.

 It is worth mentioning that the number of mutual funds operating in Egypt by the end of 2017 was 101 funds, including real estate investment trusts REITs. The net assets of mutual funds was amounted to 28.2 billion pounds by the end of 2017. Moreover, mutual funds established by banks represent the largest proportion of total funds. Of the 100 funds, 90 were established by Egyptian banks. Figures showed that the activity of the Egyptian mutual funds market is still suffering from concentration towards the banking sector in terms of incorporation; also, it suffers from a decline in the number and relative value. During the period (2013-2017), the number of funds did not exceed more than 10%, with the number of funds increasing from 91 to 101 funds currently. While the ratio of net assets of mutual funds to market capitalization declined from 15% in 2013 to 3% by the end of 2017.